Eurozone inflation drops further below target

Friday

Jan 31, 2014 at 12:01 AMJan 31, 2014 at 10:15 AM

BRUSSELS (AP) - Inflation across the countries that share the euro fell further below the European Central Bank's target in January, a development that may stoke speculation of another interest rate reduction.

BRUSSELS (AP) — Inflation across the countries that share the euro fell further below the European Central Bank's target in January, a development that may stoke speculation of another interest rate reduction.

Eurostat, the EU's statistics office, says Friday that inflation in the 18-country eurozone fell to 0.7 percent in the year to January, down from 0.8 percent the previous month. The consensus in the markets was for a rise to 0.9 percent.

The fall is likely to trigger speculation that the eurozone is about to suffer a debilitating bout of deflation — falling prices can hurt an economy as consumers delay purchases in the hope of getting bargains down the line and businesses postpone investment.